Presidential candidate Senator Elizabeth Warren has proposed a plan which would, according to Reuters, streamline bankruptcy law by creating a single process and offering families far more flexibility in deciding how to discharge their debts.
The plan would merge Chapter 7 and Chapter 13 into a single process.
“The banking industry spent more than $100 million to turn that bill into a law because they knew it would be worth much more than that to their bottom lines,” Warren wrote. “But it was terrible for families in need.”
Warren argued that her research showed most families go bankrupt not because of financial misbehavior but because of events out of their control: a lost job, a medical problem or a divorce. As part of her plan, Warren seeks to repeal a 2005 law originally intended to slow the pace of bankruptcies.
According to Warren, the legislation resulted in fewer bankruptcies and more insolvencies and caused hundreds of thousands of additional mortgage defaults and foreclosures in the wake of the 2008 recession.
In November 2019, Warren pledged to create a Tenant Protection Bureau as part of her previously announced $500 billion affordable housing plan. According to Senator Warren, the Bureau will be modeled after the Consumer Financial Protection Bureau (CFPB).
“Before the financial crash, I came up with the idea for a consumer financial protection agency—a new federal agency dedicated to protecting American consumers. I fought for that agency, helped build it from scratch, and now the CFPB has returned nearly $12 billion directly to consumers scammed by financial institutions,” Warren said, according to The Hill.
Warren also notes that, as President, she would create a national public database of information about large corporate landlords, including information like corporate landlords’ median rent, the number and percentage of tenants they evicted, building code violations, the most recent standard lease agreement used, and the identity of any individuals with an ownership interest of 25% or more, either directly or indirectly, in large landlords’ corporations, LLCs, or similar legal entities.